The Answer To Your Financial Problems. Litigation funding which is also called legal financing is an arrangement in which a third party bears the total or part of the cost of a litigant’s lawsuit. Litigation funding/legal financing is not a new concept at all. As a matter of fact, this practice has been in existence in Wales and England since 1967.

Litigation Funding

The third party which in this case is the lawsuit financing company bears all the cost and risks associated with the litigation on behalf of the litigant. They do this with a view of getting a percentage of the settlement should the litigant win the case.

Litigation funding is mostly required in situations where the litigant cannot afford the costs associated with the case/litigation. Or maybe, the litigant can afford the cost of the litigation but does not want to pursue the case with his own money. Whatever is the case, the third party will bear all the costs that are associated with the law suit on behalf of the litigant.

Getting to know more about litigation funding

Of course they don’t do it for free; the litigant and the third party funding company will agree on a certain percentage of the proceeds of the case, that is if the litigant wins the case. The percentage of the settlement that will accrue to the litigation funding/legal financing company is calculated based on the amount the legal financing company is putting into the case.

The best part is that the litigant owes the legal financing company nothing if he/she is not victorious in the litigation. This means that the litigation funding company bears all the risk. If the litigant loses the case, all the money that the litigation funding company spent will be lost for good. So basically, if the litigant wins, the litigation funding company wins, and if the litigant loses the case, the litigation funding company loses money as well.

So to ensure that they don’t invest blindly; litigation fundingcompanies always go on a background investigation to ascertain that the litigant stands a better chance of winning the case. Once they have ascertained this, the company will now go ahead to fund the litigation on behalf of the litigant. Most legal financing companies also insist on higher percentage of the lawsuit settlement as a condition for undertaking the cost of the litigation for the litigant.

I mean who would blame them; considering the fact that they will lose every penny they spent on the case if the litigant fails to win the case/litigation.

So if you are involved in any form of litigation and you cannot afford the costs associated with the lawsuit, go to a third party or litigation funding company to ask for help.

There are many companies out there that are willing to help you bear the costs associated with the litigation for a reward. To these litigation funding companies, what they are spending for you is called a risky investment which might payoff at the end of the day.